At the same time, Russian oil interests – specifically those of the Russian parastatal Gazprom – are hitting Western-placed hurdles to their coveted South Stream natural gas pipeline project to the West. That's right when Putin and the Kremlin need it most.

These two events are hundreds – in some cases thousands – of miles apart, but they will have major, immediate impacts on energy prices. And understandably, investors are worried.

Yesterday, we caught up with Dr. Kent Moors for his unique insight, just as he finished speaking to the country in a Fox News interview.Kent had a very different take on events, saying, "We're in an unusually advantageous situation for American investors."

Money Morning: Yesterday Iraq blew up into civil war, with a complicated mix of warring factions. What's your take on the situation as it unfolds, and what are the impacts to Iraq's energy reliability?

Dr. Kent Moors: The impact on Iraqi oil is going to get worse the longer the crisis continues. Which means the price of oil will be up again today. The market is taking a worst-case view so oil prices were up to almost $107/barrel here in the U.S. yesterday and over $113 in London, and that's going to be added to today.

In terms of how far this goes, it's going to depend on several factors.

Oil prices today are closing in on $107 a barrel as the crisis in Iraq worsens. Here's where oil prices are headed and what consumers can expect.

If it looks like Iraqi production may be adversely impacted by what's occurring over there, then that's when the price increase is going to accelerate.

If the fighting centers around Baghdad, which is not a high oil-producing region, and does not move south into the Basra area, then we may see a tempering of the prices. However, we aren't going to see prices going down anytime soon.

The other factor that people ought to be concerned about with Iraq is northern production.

That's about 20% of the oil that comes out of Iraq daily. That's centered in and around the city of Kirkuk. The Kurds have taken over control of Kirkuk, and they've essentially assimilated the city into Kurdistan, which is a semi-autonomous region in northern Iraq.

That means the oil flow going to Ceyhan in southeastern Turkey will probably be protected.

If the United States goes in, in any military capacity whatsoever, it'll go in first to defend the Kurds.

MM: Was the takeover of Kirkuk by the Kurds quick to develop?

Kent: That essentially happened overnight, and it happened because the Iraqi army just left Kirkuk. They completely withdrew, and the Peshmerga, the very capable Kurdish militia, took over control of the city.

MM: Getting to your earlier point, what's the likelihood of an American military intervention in Iraq?

Kent: I doubt seriously there's going to be any American boots on the ground. We'll be providing assistanceand maybe even some air cover, but we'd have to be very careful. Moving back into this region simply sends the wrong message, and then people start reacting to the next American incursion, rather than what's going on domestically.

Military intervention will probably be dictated indirectly by NATO, because Turkey has a border there. Turkey has called for an emergency NATO session on the situation that's taking place in Iraq. So I wouldn't be surprised at all to see a combined Turkish/Kurdish response to this.

MM: How would the Turks and Kurds coordinate, and what would be the impact to investors, if any?

Kent: Well, there's a couple of things that will happen that will be of interest to investors.

Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.

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